Recent credit card reform was intended to protect consumers from unfair credit practices but stay-at-home parents are bearing the burden too, the awareness of which is bringing all kinds of new concerns regarding the still young policy.
Now more than two years into its life, the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (colloquially known as the CARD Act) is getting new exposure as exposure of its snags are coming to light. Although the problems it causes are nothing new, it has taken awhile for lawmakers and financial companies to get around to addressing them. This is, of course, despite the immensely positive impact that the new regulations have provided to consumers all over the United States.
Disregarding the safety net that the Credit CARD Act of 2009 has provided to consumers who are tired of predatory and other unfair practices exhibited by credit card companies over the past several years, there are consumers who have been filing complaints about the change. Among these consumers is a particular group of people who have been negatively affected by the CARD Act even though they have done nothing wrong.
Indeed, according to a report from the Charleston Daily Mail, the Act that was intended to protect people who cannot afford credit card payments from getting approval has also prevented stay-at-home parents from getting their own accounts.
The reason for this is simple: the CARD Act requires that anyone who applies for a credit card have an income of their own in order to support the payment schedule. Stay-at-home parents, of course, rely on the income of their spouse in order to pay bills and cover personal expenses.
At first glance this might not appear to be a big deal but in this highly independent-minded America of 2012 not having access to your own money, your own credit is quite limiting. In addition, even though no one wants to talk about divorce or death, stay-at-home parents who are not able to get a credit card are placed in a particularly difficult position of not building a credit history that they can rely on later in life if something undesirable and unforeseen happens. Financial planners often recommend that people establish some kind of credit record early in life so that they can have access to better credit rates and products in the future. These new regulations negate this counseling.
U.S. Rep Shelley Moore Capito, who is a West Virginia Republican, told the Charleston Daily Mail,
As a former stay-at-home mom, I think it is important for folks who are staying at home to raise a family to have opportunities for credit. I think this rule is an unintended consequence of what was mostly aimed at students, where they were getting solicited for cards, running up debt, and nobody was looking at [it].
Indeed, this is the case and this is what lawmakers are trying to dissect.
Thankfully, the House Subcommittee on Financial Institutions and Consumer Credit, conveniently chaired by Capito, recently held a hearing on this matter. The result is not yet public, but the outlook is positive as this hearing brought together all kinds of experts to testify on the CARD Act’s effect on consumers and businesses across the United States.
Richard Cordray, the director of the Federal Consumer Financial Protection Bureau, has said, in the past, that he will review the original Act ruling so perhaps now is the time to redeem this promise. Hopefully all of this action will help to reach a few new amendments in the very near future so that the new credit card regulations can continue to provide the kind of provisions they were intended.
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